Commission approves €350 million Spanish scheme for developing electricity storage facilities

The European Commission has approved, under EU State aid rules, a €350 million Spanish scheme, made available through the Recovery and Resilience Facility (‘RRF’), to support the construction and operation of electricity storage facilities.

The measure contributes to achievement of the European Green Deal targets, while helping to reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan.

The Spanish scheme

The scheme notified by Spain, with an estimated budget of up to €350 million, will be fully funded through the RRF following the Commission’s positive assessment of the Spanish Recovery and Resilience Plan and its adoption by the Council.

The scheme, which will run until June 2026, aims to: (i) increase the share of renewable energy sources in the Spanish electricity system; (ii) decrease the deliberate reduction in renewable electricity generation at times of overproduction; and (iii) support the secure operation of the Spanish electricity system.

Spain submits a petition to revise the recovery and resilience plan and include a REPowerEU chapter

Under the scheme, the aid will take the form of investment grants for the construction of electricity storage facilities, with a joint capacity of approximately 1000 MW connected to the transmission or distribution network. The maximum amount of aid per beneficiary will be €50 million.

The projects will be selected through transparent and non-discriminatory bidding processes. The award of the contracts to the selected projects should take place before the end of 2024. The storage facilities should enter operation by the end of 2026 (except for pumped hydro storage, which may enter operation by the end of 2030).

The Commission’s assessment

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union (‘TFEU’),  which enables Member States to support the development of certain economic activities subject to certain conditions, and 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’).

The Commission found that:

• The measure facilitates the development of an economic activity, in particular renewable electricity generation. At the same time, it supports the objectives of key EU policy initiatives such as the the European Green Deal and the REPowerEU Plan.
• The scheme is necessary and appropriate to speed up investments in electricity storage facilities. In addition, the scheme has an incentive effect, as the electricity storage projects would not have been carried out without the public support.
• The measure is proportionate, as the level of the aid corresponds to the effective financing needs and necessary safeguards limiting the aid to the minimum will be in place, including a competitive bidding process for awarding the aid.
• The aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU.

On this basis, the Commission approved the Spanish scheme under EU State aid rules.

More information: European Commission